The court emphasized that both the assessee must prove the genuineness of exemption claims and the Department must substantiate any allegations of falsity with evidence.

ORDER :

(Order of the Court was made by Dr.ANITA SUMANTH, J.)

Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorari to call for the impugned proceedings of the first respondent in T.A.No.11/2005 and quash the impugned order dated 2.5.2008 as illegal and contrary to the law laid down by the recent order of the Madurai Bench of the Madras High Court in W.P.(MD)Nos.809 to 816/2006.

The petitioner has challenged an order of the Sales Tax Appellate Tribunal (STAT/Tribunal) dated 02.05.2008 relating to the period 1997-98.

2. The issue that arises for consideration relates to transactions in respect of which the assessee has claimed exemption under Section 6(2) of the Central Sales Tax Act, 1956 (CST Act) on the ground that the transactions were transit sales.

3. A pre-assessment notice had been issued to the petitioner suspecting transactions made to two entities by name Logesh Enterprises and Surya Enterprises. In the notice, the assessing authority had referred to an inspection on 19.06.1998, where the documents relating to transactions with the aforesaid two entities had been discovered.

4. According to the assessing authority, the Registration Certificates of the two entities had been cancelled, on 31.03.1996 in the case of Logesh Enterprises, and on 31.03.1997 in the case of Surya Enterprises. Hence, the authority was of the view that the transactions qua unregistered dealers had been camouflaged and exemption claimed as transit sales. The proposal was thus to deny exemption in respect of those transactions along with levy of penalty.

5. By way of reply, the assessee reiterated the exemption claimed in the Returns filed, and also produced Form C that had been issued on 09.12.1998 in the case of Surya Enterprises and on 05.05.1998 in the case of Logesh Enterprises by their respective assessing authorities.

6. The assessee pointed out that those forms have been issued by the Commercial Tax Officer, Sattur Assessment Circle and that due enquiry could have been made with that assessing officer to verify the genuineness of the transactions.

7. Notwithstanding the objections that had been raised, an assessment order came to be passed confirming the proposals. The assessee filed an appeal before the first Appellate Authority assailing the assessment order, who on consideration of the matter conduced an investigation/enquiry with the Deputy Commercial Taxes Officer, Sattur Assessment Circle.

8. That assessing officer appears to have confirmed that those two entities (Logesh Enterprises and Surya Enterprises) were not assessed by that assessment circle and that the Forms produced by the petitioner had not been supplied by that assessment circle.

9. The turnover relating to the transactions with the two entities as aforesaid was thus treated as an interstate sale and the exemption claimed was rejected. As regards the Forms filed, the appellate authority eschewed the same, holding that their source was unknown. The penalty was set aside on the ground that the appellants had filed the necessary Forms and holding that there was no wilful evasion on the part of the assessee.

10. That apart, he finds that the turnover had itself been disclosed in the books of accounts and the assessment had been completed on the basis of the accounts. As against the deletion of the penalty, no appeal has filed by the Commercial Taxes department and the deletion of penalty has hence attained finality.

11. The petitioner challenged the denial of exemption and filed an appeal before the STAT. The STAT, by order dated 02.05.2008 proceeds to confirm the concurrent findings of the assessing officer and first appellate authority, holding that the Forms that had been produced by the assessee before the Officer were non-genuine and that the registration certificates of the two entities had been cancelled even prior to the dates of transaction. It is as against this order that the assessee is before us.

12. In the course of